CFTC Slams Brazilian Crypto Founder with $130M Fine for Illegal Investment Scheme

The U.S. Commodity Futures Trading Commission (CFTC) has imposed a significant fine on the founder of EmpiresX, a Brazilian national, for operating an illegal cryptocurrency investment scheme. The total penalty amounts to over $130 million, including fines and restitution.

The CFTC's order, issued by U.S. Southern District of Florida Judge Cecilia Altonaga, includes a permanent injunction, financial penalties, and other legal actions against the founders of EmpiresX, Emerson Pires and Flavio Goncalves, as well as their partner, Joshua Nicholas. The case was initially filed on June 30, 2022, and resulted in a default judgment due to the defendants' failure to respond to the charges by the deadline.

According to court documents, Empires Consulting, the company behind EmpiresX, operated a fraudulent investment scheme that promised high returns to investors. Pires and Goncalves were accused of obtaining at least $40 million from victims through false cryptocurrency advertisements. Instead of investing these funds as promised, the founders misappropriated them to buy Bitcoin and Ethereum, restricted withdrawals, and displayed fictitious profits from non-existent investments. The funds were used for personal expenses, including luxury purchases and travel.

The CFTC's action against EmpiresX is part of a broader effort to combat fraud and misconduct in the cryptocurrency industry. The agency has warned investors about the risks associated with unregulated cryptocurrency platforms and the potential for fraudulent schemes. As the cryptocurrency market continues to grow, so does the need for robust regulation and oversight to protect investors and maintain market integrity.